TAYLOR: Tough call ahead on potential tech centre

The NDP government is being put to the test again over the possibility a major technology company could establish a Canadian centre of excellence in Halifax.

The Dexter government, which has been tested in recent months trying to salvage major resource-based industries, is facing a crisis of conscience this time.

The government, which seems to have gone out of its way to limit public-service job disruptions, is now being asked to help create a national financial centre in Halifax by outsourcing about 120 Finance Department jobs.

The union representing the workers is opposed to the idea, citing a loss of control over sensitive financial information.

The outsourcing of jobs would be an incentive for the unidentified information technology company —believed to be IBM Canada — to consider putting its operation here.

Shifting some jobs from the government payroll also offers an opportunity for the province to reduce the public service, which could come in handy as it attempts to balance the books before the next election.

The decision comes down to trust.

If the Finance Department could be convinced the work could be carried out efficiently and without any loss of security, the ultimate decision seems to be a no-brainer, especially if none of the affected workers lose jobs.

Developing a national financial service centre has the potential to create many more jobs. The added tax revenue that would be created would assist the province as it attempts to compensate for the lost tax revenue created by events such as Bowater Mersey’s demise.

Finance Minister Maureen MacDonald recently forecast a projected $10.9-million drop in corporate profits, mainly due to a delay in getting the Port Hawkesbury Paper LLC mill into production and the closure of the Bowater Mersey mill in June.

Having a major private-sector financial services operation in Halifax also has the potential of creating a financial services cluster capable of attracting similar operations to the Nova Scotia capital.

Adding a financial services centre has the potential of creating new opportunities for more of Nova Scotia’s university graduates, rather than allowing such a valuable resource to leave the province in search of jobs.

But I have heard that competition for the Canadian centre is stiff and Halifax is but one city in the running. A decision is expected before the end of October, so a timely provincial announcement about an outsourcing contract may be enough to tip the scales in Halifax’s favour.

The workers operate the province’s pricey SAP data management system, which calculates government payrolls, budget numbers and financial information for public-sector organizations such as district health authorities and Nova Scotia Liquor Corp.

The government doesn’t have a lot of options.

Finance Minister MacDonald is forecasting a deficit of $249 million for fiscal 2012-13, and the provincial debt is more than $13 billion.

The government has just handed $124.5 million to the owners of Port Hawkesbury Paper to keep the plant operating, and tax revenues the province could earn from that operation are expected to be depressed, at least over the short term.

Nova Scotia needs to find new sources of revenue, and one way to do that is to find a less costly way to expand the economy.